Benchmarking is a process used to measure the quality and performance of your company’s products, services, and processes. These measurements don’t have much value on their own that data needs to be compared against some sort of standard.
The objective of benchmarking is to use the data gathered in your benchmarking process to identify areas where improvements can be made by:
- Determining how and where other companies are achieving higher performance levels than your company has been able to achieve.
- Comparing the competition’s processes and strategies against your own.
- Using the information you gather from your analyses and comparisons to implement changes that will improve your company’s performance, products, and services.
8 Steps in the benchmarking process
- Select a subject to benchmark
Executives and other senior management should be involved in deciding which processes are critical to the company’s success. The processes should then be prioritized based on which metrics are most important to all stakeholders. After prioritizing, select and define the measures you want to collect.
- Decide which organizations or companies you want to benchmark
Determine if you are going to benchmark processes within your own company, a competitor, or a company outside of your industry.
It may be hard to collect all the data you want if you benchmark a direct competitor. So you should select several different organizations to study in order to get the data you need. Gather information from several sources to get the most detailed information about the organization you select to study.
- Document your Current processes
Map out your current processes so you can identify areas that need improvement and more easily compare against the chosen organization.
- Collect and Analyze Data
This step is important but it can prove difficult when you are trying to gather data from a competitor because a lot of that information may be confidential. Gather information through research, interviews, casual conversations with contacts from the other companies, and with formal interviews or questionnaires.
You can also collect secondary information from websites, reports, marketing materials, and news articles. However, secondary information may not be as reliable.
After you have collected enough data, get all stakeholders together to analyze the data.
- Measure your performance against the data you’ve collected
Look at the data you’ve collected side by side with the metrics you gathered from your analysis of your own processes. You may want to layer your performance metrics on top of your process diagrams or map out your competitor’s processes to more easily see where you’re falling behind.
As you analyze the comparisons, try to identify what causes the gaps in your process. For example, do you have enough people and are they sufficiently trained to perform assigned tasks? Brainstorm ideas to effectively and efficiently fill those gaps.
- Create a plan
Create a plan to implement changes that you have identified as being the best to close performance gaps. Implementation requires total buy-in from the top down. Your plan must include clearly defined goals and should be written with the company’s culture in mind to help minimize any pushback you may get from employees.
- Implement the changes
Closely monitor the changes and employee performance. If new processes are not running smoothly as expected, identify areas that need to be tweaked. Make sure all employees understand their jobs, are well trained, and have the expertise to complete their assigned tasks.